Carlyle Bust Joins Storied Line of Hotel Gambling Rings

A crowd in a casino in Reno, Nevada, in 1910, when the city featured "the last open gambling. Source: Library of Congress, Prints and Photographs Division

April 24 (Bloomberg) -- Last week, Federal Bureau of
Investigation agents descended on the Helly Nahmad Gallery at
the Carlyle Hotel on the Upper East Side of Manhattan.

Hillel “Helly” Nahmad, the gallery’s owner, was charged
with running a high-stakes gambling operation in New York and
Los Angeles that attracted multimillionaires and billionaires.
Though the gallery was only a tenant of the hotel, the
allegations -- which include suggestions that Nahmad coordinated
his efforts with powerful Russian mobsters -- evoke the long
intertwined history of hospitality, gangsters and games of
chance.

Before the early 1800s, games of cards often took place at
the local tavern. In the 19th century, as many industries spun
off from taverns (hotels, restaurants, clubs and saloons),
gambling also developed its own specialized institutions:
gambling houses and halls, riverboat saloons and the posh
palaces of Gold Rush San Francisco.

But the tenuous legality of betting meant that these
businesses would often fold, pushing gamblers toward clandestine
operations in other service-sector businesses, such as saloons,
bachelor apartment houses and hotels. In 1894, New York state
helped consolidate gambling into hotel life by passing a
constitution that banned “lottery or the sale of lottery
tickets, pool-selling, book-making, or any other kind of
gambling.”

Legitimate Cover

Illegal gambling in and around hotels flourished. Floating
poker games were often played in hotel rooms and became more
popular when district attorneys cracked down on free-standing
gambling houses. The same pattern applied to prostitution --
enforcement pushed it from brothels to the streets and anonymous
hotel rooms -- as well as the sale of liquor after Prohibition.
The unintended consequence of greater vigilance against such
crimes was that criminals sought cover inside legitimate
businesses.

It was always an open question whether hotel owners and
managers countenanced the gambling that took place under their
roofs. In 1905, the police raided a game in a Cleveland hotel
owned by John D. Rockefeller. The chief of police, Fred Koehler,
followed up with a letter to the magnate.

“Three times this department has been called upon to raid
rooms in the Weddell House,” he wrote. “I cannot believe that
this has been done with the knowledge and consent of yourself as
the proprietor.”

It may be that Chief Koehler meant this facetiously; when
District Attorney Edward Swann of New York County announced a
crackdown on hotel gambling in 1918, he was more direct. “The
managers of the hotels,” he wrote, “know what is going on in
their establishments and cannot easily escape responsibility.”

Hotel managers’ ignorance seems especially unlikely when it
comes to the highest-rolling gambling rings, such as New York’s
Partridge Club, which attracted judges, retired police officers,
attorneys and ex-Fire Commissioner John H. O’Brien to rooms at
the Ritz-Carlton.

When a police captain confronted the management of the
hotel, the game moved across town to the Imperial.

And hotel lobbies and bars were a good place to snare
tourists looking for a game. It became common practice for
professional gamblers to send “runners” to snag out-of-town
“boobs” to be fleeced.

Hotel Accomplices

Hotel detectives kept track of professional gamblers and
runners, and threw them out when they caught them, so new
runners always had to be found. Sometimes the gambling rings
enlisted the help of hotel employees, such as bellhops, elevator
operators and telephone operators, who were tipped generously
when they helped steer clients to runners, or kept the house
detectives away.

The greatest of all the hotel gamblers was Arnold
Rothstein. Best known for fixing the 1919 Black Sox World Series
(which he may not have actually done), and for his portraits as
Nathan Detroit in “Guys and Dolls” and Meyer Wolfsheim in “The
Great Gatsby,” Rothstein got his start running a floating craps
game in New York.

He later said: “I always gambled. I can’t remember when I
didn’t. Maybe I gambled to show my father he couldn’t tell me
what to do, but I don’t think so. I think I gambled because I
loved the excitement.”

Rothstein eventually graduated to other crimes --
bootlegging, drugs, prostitution and labor racketeering -- and
to some legitimate businesses, such as his ownership of the
Fairfield Hotel on West 72nd Street.

But his love of gambling endured. In the summer of 1928, he
dropped in on a game run by George “Hump” McManus and lost
$322,000 over the course of two days and a night. He left the
game without paying, promising that he would soon have cash on
hand.

Many weeks later, sitting at his regular table at Lindy’s,
he got a phone call summoning him to Room 349 at the Park
Central Hotel. He placed a bet -- $60,000 on Herbert Hoover to
win the presidential election -- got up from his chair, and
walked out of Lindy’s.

Hours later, the hotel detective found him at the bottom of
the service stairs, shot in the groin. He lingered for a couple
more days in the hospital, refusing to say who shot him, and
died. The Park Central was later renamed the Park Sheraton, and
in 1957, Albert Anastasia, another gangster who also knew
something about gambling, was shot dead in its barber shop.

(Daniel Levinson Wilk is an associate professor of American
history at the Fashion Institute of Technology. The opinions
expressed are his own.)